ETFs Move Out on the Yield Curve

BlackRock’s iShares has launched two new fixed-income ETFs that will provide a way to allocate portfolio assets to a broad index of longer corporate, U.S. and international bonds. The iShares 10+ Year Credit Bond Fund (CLY), tracks the BofA Merrill Lynch 10+ Year US Corporate & Yankees Index, intended to mimic “long-term, investment-grade U.S. corporate and Yankee bond markets,” according to a December 9 announcement. The index components include publicly issued corporate debt of U.S. and non-U.S. dollar-denominated companies, and “foreign government debt and supranational debt,” with at least 10 years to call or maturity and outstanding face value of $250 million or more.

The iShares 10+ Year Government/Credit Bond Fund (GLJ) tracks the BofA Merrill Lynch 10+ Year US Corporate & Government Index. Components of this index include the investment-grade corporate, foreign government and supranational debt above, plus U.S. Treasury and agency debt.